Dear Sir/Madam,
I am honoured to present the Impact Report of Polskie Sieci Elektroenergetyczne for 2021. The publication shows the company's financial and non-financial data in an integrated manner, but above all it presents the impact of operations of PSE on the economy, public finances, society and environment.
Last year was dominated by events that particularly affected the global economy and the oil and power sector that is part of it. In the spring and autumn of 2021, the impact of the pandemic was felt, while in the second half of the year, political and economic tensions began to build up in relations with Russia, which were reflected in the prices of energy resources, in particular gas. Russia's invasion of Ukraine has exacerbated these phenomena. The power system has been influenced by both global and regional market-driven factors, as well as by the regulatory changes that determine the operations of PSE. At the same time, the discussion about the future shape of the energy market in the EU has been continued for several years.
Regardless of the environment and external situation, the priority for our organisation is and will be to ensure the safe and economical operation of the power system. Its stable operation means a reliable supply to all consumers. This would not be possible without investing in the development and maintenance of the extra high voltage infrastructure. In 2021, infrastructure investments amounted to PLN 969.7 million. Between 2023 and 2032, we plan to allocate approx. PLN 36 billion for this purpose.
In the face of a growing energy crisis, PSE has a number of tools at its disposal to balance the system. Four years ago, the capacity market was implemented to support the security of operation of the NPS. The assumption is that it should guarantee generation adequacy in the medium and long term, providing the financing necessary to maintain the existing and build new generation sources. Therefore, the capacity market is also an important part of the transformation of the power sector. In 2021, we carried out a number of processes to enable the signing and execution of capacity agreements. A total of 128 capacity agreements were concluded as a result of the main auction, including 17 for a period of more than one year. This allowed for achieving 7.2 GW of total capacity obligations resulting from the concluded agreements for the 2026 delivery year. In addition, as a result of the capacity auctions held in previous years, we have contracted capacity obligations in the range of 23.65 GW – 24.46 GW for the upcoming 2023.
PLN 12 billion of added value for the economy
In 2021, the direct added value generated by PSE in the power sector, calculated using the Wassily Leontief input-output model, amounted to PLN 3.04 billion. The total added value generated by our company in the domestic economy is almost PLN 12 billion ─ 82% more as compared to 2020. Such a significant difference is the result of the implementation of the capacity market. It is also worth noting that PSE operations have contributed to maintaining 39,395 jobs in Poland. We paid PLN 1.08 billion of taxes and contributions to the state budget and budgets of local government authorities. In 2021 PSE paid almost PLN 327.5 million of taxes to municipal budgets.
During the reporting period, we measured our organisation's carbon footprint for the fifth consecutive time. In the last year, we have expanded the analysis of the volume of greenhouse gas emissions resulting from operations of PSE by further categories. According to the location-based method, we recorded an 11% reduction in emissions in relation to 2017, when we had calculated emissions for the first time. As compared to 2020, there was an increase of 16%. In turn, the reduction calculated using the market-based method reached 19% relative to the base year, with an increase of 8% relative to 2020. Emissions are greatly influenced by the electricity transmission process, which is inextricably linked to energy losses. 2021 was a record year for PSE in terms of energy flows in the network, with a year-on-year increase of 12% in input energy. Thanks to adequate investments in network infrastructure, the record flows did not significantly affect the loss ratio, which reached 1.47%.
Responsible development
The directions and scope of PSE development are determined by the organisation's successively implemented strategy until 2030. It is consistent with the vision of a modern electricity market and includes, i.a., the strengthening of cyber security and the development of services to make our electricity system more resilient to disturbances that could affect its reliable and stable operation. The strategy also focuses on preparing and implementing the organisation for the new role of Energy Market Information Operator imposed on PSE by law.
On 1 January 2021, PSE implemented stage I of the balancing market (BM) reform. At the same time, our organisation has commenced works on the implementation of stage II of the balancing market reform. Simultaneously, preparations are in progress to connect Poland to the European balancing platforms: MARI, PICASSO and TERRE.
The release of the Impact Report for 2021 coincided with the 4th edition of the PSE social project “WzMOCnij swoje otoczenie” [Enhance your surroundings]. In 2021, we allocated around PLN 4.6 million for projects serving local communities. We supported, i.a., education, environmental protection, health promotion, improvement of the quality of life and elimination of inequalities. In turn, as part of the “PoMOCni w walce z COVID-19” [Helpful in the fight against COVID-19] campaign, we made in-kind and financial donations worth PLN 1.6 million in total.
The study before you is the eighth social report of our organisation and the sixth publication integrated and presented in an interactive version. To ensure high quality reporting, the document has been prepared – as all previous publications – according to the highest market standards and verified by independent auditors.
Wishing you a pleasant read
Eryk Kłossowski
President of the Management Board
Polskich Sieci Elektroenergetycznych S.A.